OutSystems delivers a low-code moment and AI NextStep in Amsterdam

The low-code route for rapid application development in which OutSystems is arguably the key player, arrived in Greater Amsterdam this week as the company and its customers descended on the Dutch city and its waterways to discuss new platforms, AI and a diet of punchy, snapshot-like so-called ‘low-code moments’.

OutSystems offers a low-code platform designed to enable customers to visually develop an entire application, integrate it with existing systems, and add custom code when necessary.

Earlier in the year, it announced it had raised $360m in an investment round from KKR and Goldman Sachs. The funding values the company at over $1bn, with the proceeds being used to accelerate business expansion and for R&D in new advancements in software automation. That includes some significant work around artificial intelligence (AI).

Last month it launched the latest version of its platform, OutSystems 11, which it says enables its customers to address entire portfolios of mobile and web apps, aging core systems, and over-customised ERP and CRM systems that are critical to businesses but which are in, OutSystems’ language, “killing your productivity.”

OutSystems – whose UK public sector customers include Hackney Council and Worcestershire County Council, while another UK customer, the Post Office, presented at the NextStep event – says its low-code platform is “crafted by engineers with an obsessive attention to detail – every aspect of our platform is designed to help you build and deliver better apps faster.”

The choice of venue, out of mainstream Amsterdam, was perhaps appropriate. Zaandam is located on the river Zaan, just north of Amsterdam, and the municipality of Zaanstad nowadays amalgamates a number of smaller towns and villages, which have their origins in Late Middle Ages.

In the 17th century a string of small towns grew into the first industrial area in the world. Hundreds of windmills were employed to produce all kinds of produce like flour, timber, paints and oil for the city of Amsterdam, at the time the largest port in the world.

You could argue OutSystems’ quick migration mentality mirrors the work of those 17th Century Dutch merchants quickly turning out materials for the Dutch Masters in nearby Amsterdam. Similarly, OutSystems’ presence in Zaandam makes it arguably the necessary deliverer of the requisite materials – low-code – to enable fast project migration. In OutSystems’ case, the goal is to cut projects of four years down to 14 months.

That was certainly the case with OutSystems’ involvement with the utility business in Holland, in which it now has a strong presence.

Chief executive Paulo Rosado, who founded the company in 2001 – and in heritage certainly more a Portuguese Master than a Dutch Master – explains, “We introduced the platform in Holland and we started getting known. Then the country’s utilities were being deregulated and so the systems, all of them, over a space of two or three years had to be rebuilt. A lot of our customers in Holland built their billing systems using OutSystems, because it was the only fast way to be able to comply with the new regulatory environment. So if you can extend that concept into government, and all of the problems of government, the only thing that’s missing is ‘Why wouldn’t you do it?”

Discussing further how low-code is being adopted in the public sector, Rosado said, “The opportunities in the public sector are fundamentally in two use cases. One of them is this thing that’s been part of – especially in the UK – of digitisation of communication with the citizen or resident. We’ve seen that too in the US. We are acquiring a lot of agencies, cities and counties and the first they do is digitalise the relationship with the resident. That’s great because what you are really trying to do is remove bureaucracy and you want the government to be closer to the people.”

Rosado cited the example of the City of Oakland in California, which has created a service for residents to file an anonymous complaint against a police officer – a key issue in a racial, sensitive area of the state.

“Each constitution or city has particular issues. Some of them are roads that are terrible. Others are schools that need care. Others have very large social programmes and the fact that you can automate those processes and bring the residents more into this…. We have seen a lot of users of low code just because it’s fast and iterative and you can add things very quickly.”

But there is also a bigger opportunity, says Rosado. “I think the big opportunity is this legacy gridlock that we’ve seen in very large organisations. In government, it’s 20-40% worse. Most systems that we see inside governments are bespoke, custom-developed systems because of the nature of the laws.

“If you take a county and you build up a school management system or a court system or a juvenile court system. These are typical systems in the United States. But if you take, like the way you manage licensing in a particular country, it’s very different.

“And then in countries, for constituencies where the laws change at a much faster rate, perhaps because of the system, or because of political instability, like in Southern Europe, you get debt flexibility, which is of the essence because you never know, there is going to be a law that will say, “From this date on, this is the way we’re going to operate.” And suddenly you have this massive system and you need to apply that change, and you have no alternative. You have to put that change in production, in pensions, in tax, in justice.”

“So for us, the biggest opportunity in government is actually a legacy migration. It’s getting out of these big blocks of monoliths and creating these architectures, these pulverised target systems in very short amounts of time. So projects of between six months, one year, maximum about 18 months, and then creating the end result which is something that can be changed very quickly.

“We sell into agencies that are at the country level, at the county level, at the city level. But fundamentally, this problem appears when you are sufficiently large. Sometimes we see coalitions of six or seven cities, for instance, saying let’s build a systems for six or seven of us – shared services – and that’s usually a project that can be done with OutSystems.”

He continued, “One of the things about OutSystems is it’s really fast to do that migration – we’re talking about projects of four years being compressed into one year to 14 months. The second thing is the end result of doing that migration in OutSystems. And the end result is a system that’s made out of parts so you can port it to the cloud and other cool stuff.

“But the most important thing is that the IP of the things that you build do not belong to anyone. They belong to the state, the company or the corporation. And the reason for this is that if you look into a piece of code, a piece of software built with OutSystems, you can reverse engineer it, you can understand what it does because of the visual artefacts and whatever.

“And so what it means is that if you have a team maintaining this piece, you can actually carve it out. Four people – you take two out, you put two juniors in and in two weeks, they would be as good as the two guys who came out. So there’s no orphan code in OutSystems. It’s documentation inside the code – there’s no documentation in OutSystems because you don’t need it.”

Rosado also provided some details of the current work around AI that is coming out of the company.

“We have isolated about 39 initiatives where AI can be used. The issue with AI is that you have to do a lot of ground work ahead of time, especially in terms of collecting and cleaning up the datasets. It’s very unsexy work, actually. I think AI is extremely unsexy from the point of view of people who labour on it. It’s very sexy from the results.

“If you look into a very first principles point of view, you come up with an idea for a digital system like a portal or whatever and you want to automate something and you want to store a particular piece of data, and you come up with an idea. Until that thing is in production, what is your lead time? How long does it take? It could be three months. In these big systems I’ve been describing, it could be four years. The promise is that as you increase the productivity of these tools, you compress these lead times. So what used to take one year now takes three months, and later on, three months converts into three weeks, three weeks into three days, and it’s orders of magnitude of compression.

“What we found with AI is that the level of assistance that you can do to a developer is staggering in a lot of areas that today take a long time. And in some areas among the 39, we can see 100 times improvements: two orders of magnitude in terms of productivity. And so we’re pursuing those types of things, things that would require highly skilled and an extremely large amount of work that can now be replaced by just feeding data, passing through models and getting suggestions.

“The AI work is ongoing work. You have to have very large datasets. One of the advantages we have (at OutSystems) is that we have one of the largest application code datasets, anonymised. So we see millions and millions of patterns and we can correlate them with a lot of other results. We have an advantage here with the technology what we’re doing with AI. But it’s still very early.”